Illinois court throws out liquor taxes, video gambling

SPRINGFIELD -- An Illinois appeals court Wednesday ruled that the state’s funding plan for its 2009 capital construction program is unconstitutional.

DOUG FINKE

SPRINGFIELD -- An Illinois appeals court Wednesday ruled that the state’s funding plan for its 2009 capital construction program is unconstitutional.

If upheld by the state Supreme Court, the decision would wipe out video gaming, higher liquor and vehicle fees and increased sales taxes on some products. The additional money was to be used to pay for a $31 billion program to improve highways, bridges, schools and other public works throughout Illinois.

The unanimous decision by the three-judge panel also struck down the state’s plan to hire a private manager to operate the Illinois Lottery and a pilot program that would allow people to buy lottery tickets on the Internet.

“While the administration’s request for a stay is pending with the Illinois Supreme Court, capital projects already in progress will continue as scheduled,” the statement said. “We would expect the Supreme Court to rule on a request for a stay in the very near future.”

After decade of impasses, the General Assembly approved the construction program in 2009. It also approved a disparate group of tax hikes and other revenue enhancements intended to pay off the bonds to be issued for those projects.

That apparently was the legislature’s downfall. The court said the bill that contained all of those revenue enhancements, plus created new funds and stopped diversions from the road fund, violated a requirement in the Illinois constitution that requires each bill to deal with a single subject matter.

“Specifically, the single-subject rule is designed to prevent the passage of legislation that, if standing alone, could not muster the necessary votes for enactment,” the court wrote.

Limiting bills to one subject, the court said, also promotes more informed debate on an issue and forces the legislature to address difficult decisions directly rather than attach them to more popular legislation.

The court said the single-subject rule has been interpreted liberally in the past, but there are limits. In this case, House Bill 255 started as a five-page bill dealing with estate taxes. By the time the capital plan was approved, it had become a 280-page bill dealing with the lottery, sales taxes, motor fuel taxes, liquor taxes, environmental protection, the University of Illinois, riverboat gambling and the criminal code, among other things.

“We find that the wide range of topics in (the bill) cannot be considered to possess a ‘natural and logical connection,’” the court wrote. “While defendants assert that the varied provisions in (the bill) fit within the broad category of ‘revenue,’ defendants’ argument is unconvincing.”

The court noted that some parts of the bill, like changes in restrictions on truck loads and weights, have nothing to do with revenue.

The court’s rejection of the revenue bill also struck down three other bills, because they were all contingent on the first bill. The others include a budget-authorization bill, a follow-up bill to clean up technical errors and the bill that actually appropriates money for projects.

Wirtz Beverage Illinois of Chicago filed the suit.

Doug Finke can be reached at (217) 788-1527.

Capital program funding sources

*Legalizing video poker in places like bars and social clubs, raising an estimated $375 million.

*Turning over day-to-day management of the lottery to a private firm and allowing the sale of lottery tickets online, $150 million.

*Increasing the tax on alcohol, $114 million.

*Extending the sales tax to previously exempt items such as candy, non-carbonated beverages, and health and beauty products, $150 million.